American lawmakers are under siege from skilled telecom lobbyists and relatively unskilled, but outraged, participants in the internet world.

The reason for the heat and steam is that telco and cable companies want a bigger slice of any revenue that is sloshing around the internet. And they want to get this bigger share by restricting quality services to those web-based companies who are prepared to pay extra – a fast lane for those with deep pockets, and a dirt track for everyone else.

Instead of us choosing what we see and do when we connect to the internet, the operators want to shape our choices in their own favour. This is in marked contrast to the way the internet was designed, by Tim Berners-Lee and others, and how it has been run up until now.

Whether you are a tin-pot company or the world’s mightiest media empire, you simply pay for your uploads and your customers pay for their downloads. No one sits in the middle, saying: “Hmmm, these packets are from Skype . It hasn’t paid us extra, so we’ll divert them to the dirt track.” But that’s the way things could develop.

A two-tier internet

If the telcos and cable companies have their way, they will be able to make these extra charges, effectively creating a two-tier internet. Of course, they will say that the existing internet is unaffected and this will be just a premium service that sits on top.

The trouble with that argument is that, if they pull it off, any internet content provider that wants to provide a snappy response (isn’t that everyone?) will need to be on the premium service. The internet will bifurcate and the premium service will become the standard and be just as clogged, possibly more so, than the dirt track.

Then what? More charges for a super-premium service?

Skype’s director of government and regulatory affairs, Christopher Libertelli, told IWR: “The cable/telco arguments are reminiscent of Vietnam War era policies, except this time they claim they have to burn down the internet to save it.”

The operators say they need such a charging system to recoup their planned infrastructure investments. This is a spurious argument because the cable companies already have the capacity in their connections, the telcos will build the extra capacity anyway so they can compete with the cable companies, and they both already collect large amounts of money from existing internet connections.

One might add that they’re not short of profit from past activities and the bandwidth needed for internet connection is marginal compared with the capacity needed for cable-style multiple-channel feeds.

The impact on innovation

Those who will suffer most from the extra charges will be the innovators who have bright ideas and create new services, then find they are marginalised because they can’t find the additional new fees.

This proposed tiering of the internet could have the side effect of stifling innovation or, certainly, the growth prospects of innovative companies. Which amounts to the same thing, really.

You might think that some of this stuff is crazy, but Google, eBay, Amazon , blogging, wikis, Software as a Service (SaaS), Flickr, RocketBoom, TechCrunch and Second Life are all signs of new thinking, new ways of working. They might not have seen the light of day without a non-discriminatory internet.

The simple fact is that companies already pay for their servers to be connected to the internet and they already pay for the bandwidth they use. If they run out of steam, they either pay more or their service is degraded or cut off anyway. At the other end, the users already pay for access to the internet and, again, if they breach the rules set by their provider, they either pay more or suffer degradation too.

Even though the American cable and telco operators are effectively a cosy duopoly and there are no realistic threats on the horizon, you can be sure that telecom companies around the world are watching closely to see how this argument plays out. After all, no one’s averse to extra sources of revenue if they think they can get away with it.

With publicly quoted companies, the long-term consequences and the national, or international, good are often secondary to the next quarter’s results. Sometimes, only legislation, or the threat of it, can modify their behaviour.

The law and the internet

These legal shenanigans may appear to be a purely American phenomenon, but the internet is global and we would all be touched by the consequences.

Last month, on 8 June to be precise, an attempt to enshrine ‘ network neutrality’ in law was decisively rejected by the House of Representatives. The argument has now moved to the Senate where another bill, commonly called the Stevens Bill , is being considered. In fact, at the time of writing, it was trundling through its full committee stage, the last step before being heard on the floor of the Senate.

The telcos, in particular, are lobbying like crazy for a favourable commercial arrangement. They want to provide the same services as cable companies and, for this to happen, they will need to increase the bandwidth to the home. At an estimated $1,500 (£830) per household, they are trying to find ways to finance it. But there are limits to what new money they can squeeze out of domestic users who already pay for channels in which they have no interest.

Internet content and service providers must seem like a perfect source of extra revenue.

Part of the problem for lawmakers is that, unless they are actively involved in the internet, they cannot understand the new open world that has come into being. Perhaps they can’t appreciate the difference between selecting from the content on offer from a cable company and selecting anything from a whole world of possibilities. The internet world would be completely compromised by any kind of preferential arrangements. For an extreme case, look at China’s restrictions on what people can reach on the internet .

The American legislators are swayed by the simple arguments of the telephone and cable companies, who effectively argue: ‘These are my pipes and I want a cut of the traffic flowing through.’ The common good, and the fact that the participants at each end of the transaction are already paying for access and traffic, doesn’t seem to enter their heads.

The Senate Commerce Committee Chairman, Senator Ted Stevens, has gone on record (eWeek, 22 June 2006) to say: “Until somebody tells me what net neutrality means, until they can give me a definition, I don’t want it in there. Right now, nobody knows what it means.” In this kind of committee, the chairman’s opinions carry great weight.

Network neutrality

Although a catchy banner to fight under, network neutrality hides an uncomfortable truth. Internet packets are actually not equal. Once they carried emails, text pages and files. Now they are just as likely to be carrying time-sensitive information such as movies and telephone calls. If all packets are treated equally, as the neutrality folk advocate, then the internet will actually discriminate against these time-sensitive packets, simply by treating them all equally.

It doesn’t matter if there’s a bit of jitter or latency in the arrival of email packets but it definitely matters if you’re on a Skype call, listening to a podcast or watching a movie.

Should packets containing child pornography or email spam be given equal treatment? Preferably not. So lines need to be drawn and principles established. There’s nothing wrong with ‘packet sniffing’ for legitimate purposes and, yes, this includes governmental snooping . What is being challenged is the idea that preference will be given to companies who pay extra, a bribe in effect, for their own material to be given preference over their competitors.

Some possible solutions

Perhaps the answer lies in providing a certain bandwidth internet connection to all who want it without discriminating by content, except as provided for by the law. Then, if people want to partake in multiplayer video games for hours on end, or watch movies and listen to podcasts, they can pay for an appropriate slice.

Cable companies and telephone operators can still add their own services as separate ‘pipes’ when they have created sufficient additional bandwidth. Health monitoring, TV and movie channels can then have their own reserved bandwidth. Users can choose the content mix that suits them, where one feed is simply designated internet. At the moment, the FCC ( Federal Communications Committee ) definition of broadband is 200Kbit/s. It might be helpful for the lawmakers to consider increasing this minimum, even if they decide to reject network neutrality and permit operators to provide an internet access dirt track.

The bald truth is that the telcos completely failed to invest in the ‘last mile’, restricting their ability to compete with cable companies or to provide a decent universal connection to the internet. At the same time, they have seen the likes of Skype and Vonage eat into their traditional revenue sources. It’s little wonder they’re fighting for every scrap of income they can find.

Unless they wake up, they may find they’ve won the battle but lost the war, as customers move to cable as the least worst option for their internet connections. Then, as soon as a realistic alternative appears, they’ll move again, leaving both telcos and cable companies as relics of the pre-internet past.